Design: Google.

The Verkhovna Rada has passed the final reading of a bill, the so-called “tax on Google,” that evens out tax rules for local and international tech companies.

The Verkhovna Rada has passed a final reading of a new tax regulation that imposes VAT on companies – international companies as well – who operate in the media space in Ukraine and earn money on online advertising, according to Interfax-Ukraine.

“We are introducing an additional norm, where we exempt all educational services from taxation. At the same time, both those that are provided in electronic form in Ukraine and those that are provided abroad,” said Danylo Hetmantsev, the Head of the Verkhovna Rada Committee on Finance, Tax and Costums Policy.

Some have been critical of the bill, stating that providers of all sorts would increase prices for the users. One of them, according to Interfax, is Oles Bidnoshyia, a lawyer at Avellum, who said the tax would increase consumer prices by 20 percent.

Long awaited

In several European countries a similar taxation has already been implemented or is being implemented. The work on the Ukrainian version dates back months. But many are opposed to the Ukrainian version, calling it “the most sweeping.”

According to Interfax-Ukraine, Ukrainian League of Industrialists and Entrepreneurs (ULIE) has said:

“The so-called “tax on Google” (in general, on multinational IT companies) has existed for quite a long time in the EU countries. This caused a flurry of discussions in Europe itself, as well as in the United States, and some changes in the pricing policies of companies. For the European format this is not about 20%, but on average 2-3-5%. Therefore, the Ukrainian version is the most sweeping.”

At the same time, ULIE argues that this is not a harmonization with the European Union, but instead a solely Ukrainian initiative.